News Corporation Is Said to Bid for Penguin - NYTimes.com

Rupert Murdoch?s News Corporation has entered what could become a bidding war for Pearson PLC?s Penguin book publishing division, according to a person briefed on the talks who could not discuss private negotiations publicly.

News Corporation?s interest comes just days after Pearson confirmed that German media giant Bertelsmann, the parent company of Random House, had approached the British company about acquiring its Penguin division.

News Corporation owns HarperCollins, one of the units of the media conglomerate that will soon be spun off into a separate publicly traded company consisting of other print assets like The Wall Street Journal and The New York Post.

Penguin, which publishes authors like Junot Diaz and the crime novelist Patricia Cornwell, would give HarperCollins greater scale as the book industry grapples with how to take on technology companies like Amazon, Google and Apple, whose cheap e-books have transformed the publishing landscape.

Pearson recently said its longtime chief executive Marjorie Scardino would step down at the end of the year, prompting speculation that it may sell its print assets, Penguin and The Financial Times, to focus on the faster-growing education business.

A spokeswoman for News Corporation declined to comment.

Analysts have said consolidation of the ?big six? publishing houses is inevitable, given the headwinds the industry faces as consumers turn to e-books and brick-and-mortar stores go out of business. They likened it to what the music industry dealt with when it faced iTunes and online downloads of songs.

Mr. Murdoch?s interest in Penguin, first reported in The Sunday Times of London, which is also owned by News Corporation, could stir the pot and prompt a competitive bidding war for the book publisher.

According to the Times report, News Corporation made a cash offer of $1.6 billion. That could blunt a potential merger with Random House. If completed, a Random House-Penguin merger would create a publishing behemoth that would control roughly 25 percent of all books published in the United States and present major competition for HarperCollins.

Source: http://mediadecoder.blogs.nytimes.com/2012/10/28/news-corporation-is-said-to-bid-for-penguin/

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